What cities are best for growth in the UK, especially in a year when the issue of Brexit is dominating every decision. Many reasons for buying in an area are personal, but what you cannot escape are the cold hard facts of the figures, and if your investing then they should not be ignored, they don’t lie. However, remember just because a city showed phenomenal growth one year, it doesn’t always follow that it will be top the next year, also the reasons for the growth in the first place may be a burst that stalls once it hits a certain level. So picking the best cities and getting it right can be difficult, perhaps some would say almost impossible, but with a little research, some local knowledge and a view of an area and what investment is scheduled to take place can help you shorten the odds and provide a good template to predict future moves.
Our first consideration is the elephant in the room, Brexit. In simple terms, you can wait to see where this Brexit story takes us, but it is our view that this story will continue way past the March 29th deadline and in theory could leave you sat doing nothing for years. Also it is our opinion that in fact the worse is expected, and as such market prices have in our opinion already been heavily discounted. Developers have resisted increasing prices over the last 12 months on new build projects, and prices in areas like London and the South East have now dropped for the last 18 months, and look set to continue to drift. Across the UK in general though house prices have risen, and although activity had dropped somewhat, we have started to see transaction levels pick up in the last few months. With that we have started to see prices begin to lift a little and we now fully expect to see those that had put plans on hold over the last year or so to now re-enter the market space and once again drive prices higher. So we believe that buying property now is not the wrong decision, it will allow you to be ahead of the pack, giving you options you would not have in a crowded market.
So where to start? Well key to any growth story is investment, whether it is a large infrastructure project, regeneration and new builds, industry moving to an area or a combination of all these. The resulting impact will always be a movement of people to that particular city and with it the drive on demand, and hence the push higher in prices. So with this in mind, what are our top picks?
First, and remaining a perennial favourite of ours is Manchester. This city has in the last 5 years seen growth in excess of 30% and is set to continue pushing on, being the main driver of the North West region, which features highly in this list, but not exclusively. Expectations are that Manchester will grow by more than 20% over the next 5 years, coupled with this rents are expected to rise by 3.5% this year and by an impressive 17% over the next 5 years.
Next up, and second in our chart is Liverpool with prices here expected to exceed 20% growth over the next 3 years alone. Liverpool is unusual in that although it saw 5.1% growth in prices 2017, the levels it finds itself at are just above the levels that the market stood at before the credit crisis in 2009, with prices just 6.3% above that marker. For us this means that with the growth in the region we expect the prices here to outperform even that of Manchester in the next 5 years, although for the next year or so we maintain that Manchester will be the front runner. With this we expect rentals following this trend to with expectations of a 3.5% increase for 2018 alone.
Last, but by no means least is Leeds. This is another great pick and a city on the rise. With it’s heavy play on financial services and the legal profession dominating, we expect the vibrant property market of Leeds to continue to grow with growth of around 3.5% this year and with a 5 year forecast close to 20%. In addition to this, Channel 4 recently announced that they will be relocating their production HQ in the city will bring a renewed focus on this vibrant city in the North East of England. Again like Liverpool and Manchester, good rental stock in the city centre will continue to rise.
For more information about key locations to invest, and how we can help you as an investor, contact our senior brokers today.